April 15, 1998


Dear                      :

         Thank  you for  taking  the time to talk  with me about  extending  our
Stockholder  Rights  Plan  at our  Annual  Meeting  on  April  28,  1998.  As we
discussed,  our rights plan  combines  several  unique,  "shareholder  friendly"
features that distinguish it from all other "poison pills." We ask only that you
consider these features before deciding  whether to support the  continuation of
our plan.

         Approved by Stockholders.  The Board of Directors of most companies can
adopt a rights plan without  stockholder  approval.  However,  we do not believe
that our  stockholders  should be  denied  the right to  determine  whether  the
company  should  have a rights  plan.  To our  knowledge,  we are unique in this
regard.  Institutional Shareholder Services (ISS), in their April 1998 review of
our plan, recognized the uniqueness of this feature: "We commend the company for
allowing shareholders to voice their opinion on the rights plan."

         IRRC also commended Texaco:  "Shareholders will be afforded the unusual
opportunity  to vote on a management  proposal to approve  Texaco's  Shareholder
Rights Plan...  Although the practice of seeking shareholder approval for poison
pills is uncommon among most U.S. companies, Texaco has made it a habit".

         All-Cash  Offers are Exempt.  The most unusual and important  aspect of
our plan is that a  fully-financed,  all-cash  tender  offer  made to all of the
company's  stockholders  that remains open for 45 business days can proceed free
of any  impediments  from our rights  plan,  even if the offer is opposed by the
Board. This "chewable"  feature makes our plan more "stockholder  friendly" than
the typical plan. CII agrees, calling our plan "shareholder friendly."

         Five-Year  Life and 20% Trigger.  We are  extending our plan for just 5
years,  rather than its current  10-year term. And the rights are triggered only
if an acquisition  or offer is for 20% or more of the company's  stock, a higher
threshold than most other plans that have triggers of just 10% or 15%.

         Advisors' Recognition of Unique Features. ISS has commended the  unique
features of our plan:

                  "This plan has several features that may be deemed shareholder
         friendly.  For instance,  it has a chewable feature that provides that,
         in  the  event  of a  fully-financed,  all-cash  tender  offer  to  all
         shareholders  that remains open for 45 business days, such an offer may
         proceed free of impediments  even if opposed by the board.  This plan's
         chewable feature does not require that a specific premium be reached in
         order  for the pill to be  withdrawn.  This is not true of many  poison
         pills.  In  addition,  the term of the pill is  extended  for only five
         years.  Most pills have terms of ten years.  Furthermore,  the  trigger
         threshold of 20% is higher than that of most pills,  which have trigger
         thresholds of either 10% or 15%.

                  "Many features of Texaco's shareholder rights plan are similar
         to, and in some respects superior to, those of the modified rights plan
         of Pennzoil Co., which  arbitrageur  Guy  Wyser-Pratte  has touted as a
         `model' for shareholder rights plans...." (underlines added)

         Encourages Higher Premiums. Studies by  Georgeson & Co. and J. P. 
Morgan have  indicated  that  stockholders  of  companies  with rights  plans 
received takeover  premiums  higher than those received by  stockholders of 
companies not protected by such plans.  And our plan,  which  requires that bids
be open for a reasonable  period of time,  increases the company's  ability to 
secure  maximum value for all stockholders.

         Only  Coercive  Tactics  Prevented.  Our  plan  does  not  prevent  all
takeovers.  It is  designed  only to deter  coercive  takeover  tactics  such as
two-tiered  offers or offers by market  accumulators  who through open market or
private  purchases  can achieve a position of  substantial  influence or control
without paying to the other stockholders a fair "control premium."

                  Although  various  provisions  in our charter and Delaware law
provide certain protections against some abusive takeover tactics,  continuation
of our  rights  plan is a  necessary  measure  to insure  that the value of your
investment in Texaco is fully protected.

         We would be pleased to meet with you  personally to tell you why Texaco
is regarded as a leader in  corporate  governance,  why the  performance  of our
company merits your continued  support,  and why the unique features of our
Rights Plan deserve your approval.

                                                      Sincerely,

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